POST-INJURY ARBITRATION AGREEMENTS LEAVING SEAMEN HIGH AND DRY.

Date22 June 2023
AuthorStein, Paige Specht

Table of Contents I. INTRODUCTION 108 A. FEDERAL ARBITRATION AGREEMENTS ("FAA") 108 B. WHY DOES CONGRESS PROTECT MARITIME SEAMEN? 109 C. JONES ACT: GIVING SEAMEN A LIFE RAFT 111 D. FEDERAL EMPLOYER LIABILITY ACT ("FELA") 111 II. ANALYSIS 113 A. PRE- INJURY ARBITRATION AGREEMENTS 113 B. POST-INJURY ARBITRATION AGREEMENTS 116 III. ARGUMENT 124 A. ARBITRATION IS NOT A BETTER ALTERNATIVE TO A COURTROOM PROCEEDING 124 B. ASKING SEAMEN TO SIGN AN ARBITRATION AGREEMENT FOR MAINTENANCE AND CURE IS A VIOLATION OF THE FAA 126 IV. CONCLUSION 127 I. INTRODUCTION

Imagine that you are working aboard a ship as an engineer and one of your tasks is to lift a 122-pound piece of steel. While lifting the steel you sustain an injury to your lower back, neck, and hands. After you are injured, the captain of your vessel takes you ashore and sends you back to your home state of Louisiana. Following the injury, you experience persistent difficulty obtaining the basic quasi-contractual rights of maintenance and cure from your employer. As part of the maintenance and cure, the company is obligated to cover your lodging, utilities, and meals, as well as pay cure for your medical expenses. Now imagine that your employer gives you $20 per day to "cover" maintenance. Not only are you injured and cannot work, but now you are not able to support yourself or your family. Your new reality is that you are barely able to live, and you cannot work because of the injuries that you sustained. In addition, your employer has been notified by your medical team that you have sustained what they consider to be "career-ending" injuries. Your employer then decides to take advantage of the situation and, instead of trying to settle the claim with you or go through the court system, they ask you to sign an arbitration agreement. As you read the document, contemplating whether you should sign it, you wonder what all the legal jargon in the document means and if your rights could be violated by signing the agreement. You hesitantly sign the document, blissfully unaware that the arbitration agreement that you just signed waived your right to a trial by jury afforded to you by the Jones Act. Thus, you have agreed to enter into a binding agreement with an arbitrator. (2) While this is an extreme example in which the employer refused to pay maintenance and cure; it is representative of a real issue that injured seamen face. Courts throughout the country have dealt with fact patterns very similar to the one described above.

This comment explores the rickety plank that seafarers are forced to walk when navigating the arbitration process. First, this comment will explore the Federal Arbitration Act and how it pertains to seamen and other employees engaged in interstate commerce. Second, this comment will discuss why seamen are traditionally protected as wards of the court, and how the Federal Employment Liability Act (hereinafter "FELA") applies to a seaman. Additionally, this section will also discuss the interplay between the protections afforded to seamen by the Jones Act and the arbitration process. Next, this comment will examine the differences between post- and pre-injury arbitration agreements through various examples of precedent and address the door that was left open regarding post-injury arbitration agreements. Finally, this comment will discuss the pros and cons of signing an arbitration agreement and explain why asking a seaman to sign an arbitration agreement for maintenance and cure is a violation of the FAA.

  1. FEDERAL ARBITRATION AGREEMENTS ("FAA")

    An arbitration agreement is a form of alternative dispute resolution in which two or more parties agree to submit their dispute to a third party, institution, or panel, which will listen to the conflicting positions of the parties and then make a binding decision. (3) The Federal Arbitration Act (hereinafter "FAA"), which was adopted in 1925, transfers an otherwise judicial dispute to a private forum where the applicable law is or should be, applied and an award is issued for those involved to resolve the underlying dispute. (4) Before the enactment of the FAA in 1925, employment disputes were generally considered to be local issues not involving interstate commerce. (5) However, transportation workers who cross state lines were considered to be involved in interstate commerce and were therefore subject to Congressional regulation. (6) Specifically, section 1 of the FAA contains an exemption for interstate commerce workers noting that: "Nothing herein contained shall apply to contracts for employment of seamen, railroad employees or any other class of workers engaged in foreign or interstate commerce." (7) When there is a Motion to Compel Arbitration, courts apply the three factors set forth in Mitsubishi Motors Corp v. Soler Chrysler- Plymouth (8) :

    (1) Whether a valid agreement to arbitrate exists between the parties;

    (2) If the dispute in question falls within the scope of the arbitration contract;

    (3) In the event that the two questions above are answered in the affirmative, the court must then consider whether there is any federal statute or policy that renders the arbitration contract non-arbitrable. (9)

    Additionally, to determine the scope of the arbitration agreement, courts must examine the language of the contract to determine if it is too broad or too narrow. (10) If the language is determined to be "too broad," the court should compel the arbitration agreement and the action should stay while the arbitrator decides if the dispute falls within the stated clause. (11) However, if the language of the agreement is narrow, courts should not order arbitration unless the claims are clearly covered under the agreement. (12) It is important to note that arbitration is encouraged and when there is a valid formation of an arbitration agreement, federal courts are required to compel arbitration. (13) A popular tactic used by shipowners and employers is to offer the employee more than just "maintenance" and "cure" by including a percentage of lost wages to deceive the seaman into presenting their claim to an arbitrator and waiving their right to a jury trial. (14)

  2. WHY DOES CONGRESS PROTECT MARITIME SEAMEN?

    There is a longstanding judicial tradition of affording seamen heightened protection as wards of admiralty. (15) Under 28 U.S.C. [section] 1333, "district courts shall have original jurisdiction, exclusive of the courts of the States, of (1) Any civil case of admiralty or maritime jurisdiction, saving to suitors in all cases all other remedies to which they are otherwise entitled. (2) Any prize brought into the United States and all proceedings for the condemnation of property taken as a prize." (16) However, federal courts do not have exclusive jurisdiction over maritime claims and a state court can entertain certain maritime claims. (17) Typically claims involving in rem (against an inanimate object) remedies against vessels or cargo are subject to the exclusive jurisdiction of the federal courts. (18) On the other hand, state courts have concurrent jurisdiction over admiralty claims when a state court is competent to grant relief, which in most instances is in personam jurisdiction (against a specific party). (19) Therefore, in personam claims may be heard in state court and are usually predicated on a party's contacts with the particular forum. (20)

    To determine whether a federal court has admiralty subject matter jurisdiction over a particular claim, U.S. courts apply a two-part test requiring a party to satisfy conditions of both (1) a maritime location and (2) a connection with maritime activity. (21) As to why seamen are given protected status, the court explains:

    A seaman is emphatically the ward of admiralty and though not technically incapable of entering into a valid contract, they are treated in the same manner as courts of equity are accustomed to treat young heirs... if there is any undue inequality in the terms, any disproportion in the bargain, and sacrifice of right on one side, which are compensated extraordinary benefit on the other, the judicial interpretation of the transaction is that the bargain is unjust and unreasonable, that advantage has been taken of the situation of the weaker party, and that pro tanto the bargain out to be set aside as inequitable. (22) Seamen enjoy the liberal application of the law because of the dangerous nature and hardships traditionally faced in their jobs. (23) As stated by Judge Biggs in Jones v. Waterman Steamship Corp., "the relationship of the shipowner to the seaman is more closely analogous to that of father and child, than that of an employee and employer." (24) Therefore, a seaman who falls ill or who is injured while in the service of the vessel and subject to the call of duty is entitled to maintenance and cure without regard to fault under traditional maritime remedies. (25) Thus, as long as the court recognizes that a seaman is a ward of the court, a seaman should have the opportunity to have legal counsel and be apprised of their legal rights to comprehend the importance or gravity of the decision to arbitrate. (26)

  3. JONES ACT: GIVING SEAMEN A LIFE RAFT

    Before enacting the FAA, Congress already advanced legislation that addressed the protection of seamen specifically, the Jones Act. (27) Congress ultimately decided to exclude the FAA's application to contracts of employment of seamen, railroad employees, or any other class of workers engaged in foreign or interstate commerce to refrain from overwriting the Jones Act. (28) Under the Jones Act, Congress created unique protections for seamen, providing solely a negligence remedy in personam against the employer. (29) Only the general maritime law remedies of "maintenance" and "cure" (30) and "unseaworthiness" may be joined with a Jones Act claim to allow an action to recover "maintenance" and "cure." (31) Thus, an injured seaman who sustained the injury in the scope of...

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